Bihar’s finance minister Vijay Kumar Chaudhary on Friday reiterated the demand for grant of special status to the state and urged the union finance minister to increase the central government’s share in the centrally sponsored schemes (CSS) in the ratio of 90:10 to strengthen the pace of progress of the state.
Speaking at the pre-budget consultation meeting with Union finance minister Nirmala Sitharaman in New Delhi, Chaudhary said decreasing share of the central government and increasing number of CSS has put financial burden on the state. Earlier, the CSS were being implemented under 75:25 funding scheme in which larger share was given by the central government. “But now, the system has been reversed. In some schemes of urban development, the state government has to spend 75% and the rest 25% is made available by the centre,” the state finance minister said, according to the text of his speech that has been seen by HT.
Citing the impact of Covid-19 pandemic, burgeoning inflation, devaluation of rupee and increasing unemployment as factors responsible for affecting growth cycle, he said fiscal deficit limit of the state should be kept at 4% of the state gross domestic production (GSDP). “Even the central government’s fiscal deficit had exceeded the limit of 7.4% and 6% as recommended by the 15th finance commission in the fiscal 2020-21 and 2021-22. A poor state like Bihar deserves additional rebate in the gross fiscal deficit,” argued Chaudhary.
Claiming that Bihar’s economy grew by 6% against the national average of 3.9%, the minister said the state should be granted the additional borrowing limit of 1% in keeping with the level of poverty in the state as adjudged by the Niti Aayog. The obligation to deposit the state’s share within 40 days of the receipt of the central grant should be removed for better utilisation of the state’s resources, he said.
Chaudhary also demanded continuance of the “special assistance to the state for capital expenditure” in the coming fiscal and urged the union minister to grant the second phase of Bihar special plan of ₹20,000 crore.
Asking for greater autonomy in taxes under the goods and services tax (GST) regime, the minister claimed only 12-15% of the GST collection is under the state’s control. “In the earlier regime of value added tax, the state used to get more share in the tax,” said Chaudhary, while asking for state’s share in the cess charged on petrol and diesel, which, he said, the centre kept on increasing.
The minister also urged Sitharaman to make provision for providing fund for maintenance of roads made under the PMGSY. He also sought to accord the Kosi-Mechi river linking project a national status and the Centre should bear 90% of the project cost.
Chaudhary claimed that the state government was still waiting for the grant of ₹600 crore for mechanisation of agriculture, which was announced by Prime Minister Narendra Modi in 2015.